Sizing Up Today's Selloff

The selloff today was meaningful, but it was hardly as bad as the plunge on Feb. 27th. On that day, the SPX fell -3.5%; today it declined -2.3%. On that day, the NDX fell -4.0%; today it fell -1.2%. (The relative outperformance of big-cap tech and growth stocks is noticeable, and has been going on for nearly 3 months now.)

But as I mentioned earlier, there were some notable spikes in the fear indicators I follow, and that bodes well for a bottom sooner rather than later. Let's take a look at some:

• The VIX spiked +27% to 23, exceeding February's levels (see earlier post)



• The new lows on the NYSE surged to 777 (see graph below); I believe this is the highest number of new lows since the bear market in 2002 (I will confirm tomorrow)



• The CBOE put/call surged to 1.52 today, pushing the 10-day average well above 1.0



• The market is now the most oversold since March (see chart below); only 24% of stocks on the NYSE remain above their 50-day moving average